A dedicated room is a huge benefit, even for a small server installation. Small servers can cause intolerable noise and can make even a large room's temperature rise immensely. There are also serious security concerns to think about if the servers share the room with other people or if they're easily accessible to people passing by.
A larger server configuration, on the other hand, will very quickly surpass tolerable and/or regulatory noise levels (which can vary by state or country). The cooling demands will also be much higher, which standard air conditioning would not be able to handle. The only option is to allow for a dedicated room with specialized air conditioning. A dedicated room will also make controlling personnel access much easier to handle. It's probably a good idea to require electronic badges or cards that will allow access, as well as keep a log of who has entered or exited.
In addition to the server itself, generally a dedicated computer room will also contain disks, back-up devices, cables, and, most likely, spare disks, peripheral cards, blades, fans, and other vital equipment. You will probably be able to provide server administration remotely, but a local console in the server room is also crucial, which will allow personnel to perform functions like maintenance and administration locally.
Environmental Issues to Consider
Your computer room must be large enough to be able to not only store the equipment, but also allow you to move and rearrange it as needed. This includes changes in air conditioning and electrical power. You also need enough room to store replacement devices such as logic cards, fans, disks, and backup tapes.
If you don't carefully estimate your current and future requirements, you may be forced to move your servers to a new room, which means a serious disruption in the company's data services. You will also have huge direct and indirect costs. Direct costs could include the cost of obtaining, building, and provisioning the new computer room. Indirect costs may and will arise, for example, when your company's inadequate storage restricts the ability to work efficiently and properly and respond effectively to competitors.
Do not store your backups in the server room. A fire could damage or destroy both the hardware and the backups. Ideally your backups should be stored offsite. Ensure that you have a large enough power supply for today's demands and the demands of the future. Don't try to be frugal when it comes to outfitting a server room. Install enough lighting and electrical outlets. Do all of the above right the first time and it will make maintenance and enhancements that much simpler, not to mention cheaper, in the future.